Cashback sites reward their members by returning a percentage of the income they receive from online businesses/retailers. While bricks and mortar businesses have a long history of providing loyalty programs, such as Tesco's clubcard, that give a form of cashback, this page will deal directly with companies who brand themselves specifically as 'cashback sites' and whose primary businesses model is to provide cashback. How cashback sites work is simple: 1) a user signs up for a free membership account at a cashback site 2) a new member then visits the cashback site (topcashback, kidstart, quidco etc) and clicks on a link (link includes tracking code) that will transfer them to the retailer of their choice; 3) the user shops as normal on the retailers site; 4) any purchase (may need to meet criteria) will then be tracked and added to the members cashback account.
The amount of cashback earnings given to members differs with each cashback site, but, Quidco.co.uk stated, in 2020, on their homepage: "Our average member earns £280 per year". The amount of cashback given by retailers varies greatly and differs between the cashback sites themselves, but it's typical to expect 2% of a purchase to be returned as cashback. The amount of retailers who work with cashback sites fluctuates, but the big cashback sites tend to have in the region of 5000 retailers to choose from. Cashback sites are generally free to join and become a member of; although some provide 'paid' plus accounts. The move away from purchasing with hard cash (coins and notes) to digital payment, especially with smartphones, has opened up bricks and mortar retailing to cashback sites that previously relied on online sales, so expect large cashback sites to begin offering their own mobile app if they already have not done so.
A little history
Within the UK, cashback sites resulted from the development of affiliate marketing: this is where businesses pay 3rd parties (affiliates) a percentage of each sale the 3rd party sends to them. In the late 1990s and early 2000s there were many shopping directory websites, these sites were typically lists of retailers who had an affiliate program and could return revenue to the shopping directory owner if their link was clicked. These shopping directories were profitable to their owners and it became hugely competitive, with more and more directories being made. Cashback sites developed this idea further by returning a percentage of the affiliate income back to the customer.
Affiliate programs are run as either standalone (Amazon etc) or are ran by an intermediary affiliate network (such as: Tradedoubler, Commission Junction, Affiliate Window (Awin), DGM). Due to the complexity of running an affiliate program -- creating unique tracking links for clicks and sales -- the majority of retailers tend to work with affiliate networks. Some of the first businesses to provide a affiliate scheme in the UK were: Amazon, Littlewoods Index, Ebay, Currys, Asos, PC World, Dixons, Argos, Debenhams, Kays, Comet, Jungle, Superfi, YOOX, HMV, Dial-A-Phone, Phones4U and Carphone Warehouse.
Cashback sites have largely replaced the shopping directories; which is no surprise, due to the added benefit to the user. The amount of cashback sites is far fewer than with shopping directories: due to the extra administration and complexity of running cashback membership, and the risks involved in handling users personal data. When cashback sites were first launched in the 2000's they were mainly accessed through a desktop or laptop computer, but cashback sites have evolved to work on smartphones with a smartphone app. Cashback apps allow users to link their payment card to the app and then shop at 'real world' bricks and mortar businesses for cashback, rather than being restricted to shopping online at a website. Real world businesses that have participated in cashback app schemes include: Walmart, Pizza Hut, Disney, Dunkin' Donuts, Backcountry, and Asos.
While cashback sites may have originally used links from affiliate networks, it is likely, but pure speculation, that they have grown to such a degree -- some large UK cashback site claim to have over 10 million members -- that they have direct relationships with the retailers and have been able to cutout the middleman affiliate networks.
Retailers on cashback sites
The following UK retailers can be found on cashback sites: Amazon, Ebay, booking.com, M&S, Currys PC World, Argos, trainline, Expedia, JD Sports, Uswitch, Gap, Adidas, Karen Millen, NordVPN, Matalan, Coach, EE, Tassimo, Garden of Life, Creat and Craft, Lands' End, H&M, Debenhams, George at Asda, MandMDirect, Ali Express, Boohoo, Studio, Topshop, House of Fraser, River Island, Dorothy Perkins, Boots, Very, AO, Wilko, Superdrug, Halfords, Apple, Lakeland, QVC, Viking, Littlewoods, Fortnum & Mason, Harvey Nichols, Leekes, Heel's, Amara, Hema, Selfridges, Wickes, Wayfair, Screwfix, B&Q, Holland and Barrett, The Body Shop, Ted Baker, Lloyds Pharmacy, Mankind, The Hut, and Pharmacy2U.
While tracking for the vast majority of purchases is recorded, it is not a guarantee, and topcashback.co.uk state that "anti-spyware, anti-virus, or other protection on your computer" can stop the tracking links from working as they should. There is also the potential that a retailer can go bust before the cashback site receives payment, or some smaller cashback sites may go bust before payment is received by the member/user. Therefore, cashback earnings are not guaranteed and should never be relied upon.
Ways to receive payment, threshold and time taken
The process of receiving cashback earnings has various stages, which typically include the following:
1) To begin with a customer will make a purchase through a cashback site.
2) The purchase should then appear on the Activity/Earnings page of the cashback site -- this is not always immediate and can take 7 days.
3) The cashback site may have to wait for the 'returns and cancellations' period to finish.
4) The retailer will then verify the sale and send the sales income to the cashback site.
5) The cashback site will confirm they have received the income and make it available to be withdrawn.
This is just a basic outline of the process, it will vary from cashback site to cashback site, and can be subject to change as technology evolves. It is impossible to give an exact timeframe for how long the process takes from purchase to withdrawal: due to what time of the month the purchase was made, and the internal processes of the retailers, but the overall timeframe is weeks and months rather than days.
When a users cashback earnings are available to be withdrawn, what are the options? Typically the three options for withdrawing are as follows: 1) Bank account using BACS; 2) Paypal, which is used by 150,000 websites; 3) Gift vouchers, examples of some gift vouchers -- for topcashback.co.uk -- are: Just Eat, ExperienceDays, M&S, Amazon, and Google Play.